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Lawyers for the Oslo exchange floated the idea of regulators lifting the purchase threshold to two thirds of the company’s shares, according to documents seen by Bloomberg News. It’s by no means certain that the authorities will adopt the idea, but if they did, it would knock Euronext out of the race because it wouldn’t be able to lay its hands on that much stock.

The Norwegian bourse has become the subject of an increasingly bitter bidding war, with Franco-Dutch Euronext vying for control with U.S. rival Nasdaq Inc. Norway’s largest bank and a top pension fund want the Americans to win, but a professor at the BI Norwegian Business School said the regulator was unlikely to help their bid by blocking Euronext.

“I think this legal position is so untenable that I would be very surprised if the ministry rejects Euronext on this basis,” professor of securities law Morten Kinander said in an interview. “The behavior of Oslo Bors will be the subject of my teaching on corporate governance for a long time to come; it will be an example of problematic behavior from target companies in takeover situations.”

The Oslo exchange told Bloomberg it’s neither recommending the idea raised by its lawyers nor trying to kill off Euronext’s bid. Oslo Bors spokesman Per Eikrem said the regulator had asked the bourse to submit the legal opinion.

“We are not seeking to change the rules in this matter or block any attempt to take over the Oslo Bors VPS Group,” Eikrem said by email. “Our adviser has made a legal assessment to Oslo Bors VPS of one possible outcome of the considerations the Norwegian authorities will be making in relation to the applications from Nasdaq and Euronext to own more than 10 percent of the company.”

35 Percent

Nasdaq has the support of shareholders with 35 percent of the stock, all of whom have agreed not to sell to Euronext, according to the U.S. company’s offer document. Raising the limit for a deal to 66 percent would therefore end Euronext’s bid.

“Euronext trusts that Norwegian authorities will apply Norwegian law and not change the rules in the middle of the process in order to block a specific bid,” said Stephane Boujnah, the company’s chief executive officer.

The Paris-listed company’s offer document was written before Nasdaq made its bid. If Euronext’s bid is blocked, the 50.5 percent of shareholders currently supporting it could defect to the U.S. company after a lock-up period expires at the end of this year. Nasdaq already operates stock exchanges across Scandinavia.

A Nasdaq spokesman said dialogue with the regulator is natural in an acquisition and that it’s up to the bourse, its shareholders and the authorities to decide.

“If a clear level of acceptance can’t be achieved from the shareholders -- for example, two-thirds or more -- there will be a situation with unclear ownership in Norway’s most important infrastructure enterprise,” Thommessen lawyers wrote in the opinion, seen by Bloomberg. “If such acceptance is not achieved, the Ministry of Finance will, in our opinion, have a legal basis for refusing the acquisition.”

Tore Mydske, the Thommessen partner who sent the legal advice to the regulator, declined to comment. FSA official Marte Voie Opland said the authority would follow the rules in handling the two takeover applications.